OSA Quiz

Test your OSA Intelligence

Question 1/9

What is the definition of On-Shelf Availability (OSA)?
A. There is no single standard industry definition
B. When your product is out-of-stock and no other stores have it
C. When your products is out-of-stock online but is in the store
D. When your products is on the shelf but mislabeled
Answer: A
There is no single standard industry definition which is one of the challenges facing suppliers and retailers. Every company defines OSA with slightly different calculations (sometimes depending on availability of data to include in the calculation). However, it is typically part of a set of metrics used to measure shopper fulfillment and is used to track customer fulfillment effectiveness. Gartner defines OSA as a “measure of items available at the shelf for selection by a shopper” that is typically measured by item/location/time horizon.

Question 2/9

On-Shelf Availability (OSA) is the same as Out-of-Stock (OOS).
Answer: B, False
OOS means a product is not available at all, whereas OSA is a measure of the product’s availability for a consumer to purchase. An item may not be on the shelf but may be in stock, perhaps in the back room, at the retailer DC, or in an incorrect location and therefore not OOS. There are many root-cause analysis tools that can help pinpoint replenishment issues, including planogram compliance, shelf replenishment failure, and ordering errors.

Question 3/9

OSA is going to be less important moving forward due to increased e-commerce.
A. True
B. False
Answer: B, False
OSA becomes even more critical moving forward with the growth of e-commerce. The “buy anywhere” expectations that omnichannel strategies promise are forcing retailers to use store inventory for demand. According to Gartner, “to increase delivery speed, the store is rapidly evolving into a preferred fulfillment node, with 78% of respondents in a recent Gartner study reporting an increase in the use of store inventory to fulfill online orders”. With online sales as a percentage of global retail sales predicted to reach 11.40 percent by 2018 and 16 percent by 2021 according to eMarketer, the need for OSA becomes critical.

Gartner, Best Practices to Improve Retail Product Availability, 7/3/17

Question 4/9

OSA and OOS rates have drastically reduced to 5% over the last 10 years.
A. True
B. False
Answer: B, False
Retail industry benchmarks from FMI/GMA cite out-of-stock (OOS) rates of 8% to 10% for non-promoted products and 10% to 15% for promoted items. These statistics have unfortunately held steady for almost 15 years despite technological advancements in demand planning and significant investments by brand owners.

Question 5/9

If OSA rates are improved 3% points, what is the impact on the bottom line?
A. 3% improvement in revenue growth
B. 1% improvement in revenue growth
C. Stagnant revenue growth
D. 5% improvement in revenue growth
Answer: B
According to IDC, on average, a three-point improvement in on-shelf availability can yield a one-point improvement in revenue growth on average. In categories which are growing only 3% or 4% annually, a one-point improvement is significant.

Question 6/9

What percentage of retailers share Point-of-Sale (POS) data with their suppliers?
A. 22%
B. 57%
C. 83%
D. 100%
Answer: C
According to FMI/GMA, 17% of retailers don’t share POS data with their suppliers at all. But even though 83% do share this data, only 57% of manufacturers say they are able to use this data in their demand and production forecasts. Anecdotal evidence suggests that the disparity in data formats provided by retailers increases the complexity for suppliers trying to integrate this data into their planning processes.

Question 7/9

What are the primary reasons retailer channel data (especially POS) is not widely integrated?
A. Data not shared by retailer
B. Dirty Data
C. Lack of IT resources
D. Combination of A, B, & C
Answer: D
Despite the belief that there is inherent value in retailer channel data, it has taken much longer for the industry as a whole to integrate downstream data into operational processes. According to Supply Chain Insights, the top three challenges to suppliers when trying to leverage retail channel data are: 1) Data not shared by retailers; 2) Dirty data; and 3) Lack of IT resources. For many companies, the combination of these three challenges contributes to the delay in implementing demand-driven strategies.

Question 8/9

Syndicated data is the best tool for managing OSA.
A. True
B. False
Answer: B, False
According to Supply Chain Insights, retail channel data is much more effective than syndicated data at addressing OSA (31% gap). Research reveals that 41% of retail data users say point-of-sale data is effective at addressing OSA whereas only 10% of syndicated users say that syndicated data is effective in managing OSA.

Question 9/9

Industry associations and trade groups believe retailers should NOT share POS data with suppliers.
A. True
B. False
Answer: B, False
FMI and GMA even published a Letterman-style Top 10 on why trading partners should share data:
10. Your mother always taught you to share your things
9. It’s what friends and partners should do
8. It builds trust and strengthens partnerships
7. It helps suppliers better meet retailers’ needs
6. It helps suppliers quickly adjust to new product introduction sales trends
5. It helps suppliers better understand promotion effectiveness
4. It helps suppliers understand local demand patterns
3. It helps suppliers better understand the effects of seasonality by region
2. It enables retailers and manufacturers to more effectively collaborate on OSA
1. You can’t effectively solve the OSA problem without accurate, timely POS data